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The 8 Ways Urban Demographics are Changing

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The 8 Ways Urban Demographics are Changing

The 8 Ways Urban Demographics are Changing

Cities are what keep the global economic machine humming.

Over 80% of the world’s economic output is derived from activities in cities – and more specifically, it’s estimated that 60% of GDP growth occurs in just the top 600 urban centers.

Given the above, it’s fair to say that the destiny of humankind is directly linked to what happens in major cities. Further, how urbanization plays out over time could end up having a significant ripple effect on the economy, and we should pay close attention to such trends.

Urbanization 2.0

Today’s infographic comes to us from Raconteur, and it showcases eight different ways that urban demographics are evolving.

Below we will summarize the changes, along with potential impacts on the economy:

1. A Higher Percentage of Urban Dwellers

Between 1950 and 2018, we went from 30% to 55% of the world’s population living in cities. This has been driven largely by today’s middle and high income economies in places like North America, South America, Europe, and Japan.

The next stage of urbanization will see us move to 68% – more than two-thirds of the world’s population – living in these urban conglomerations. It will be driven by countries in developing markets, creating a potent investing megatrend along the way.

2. The Countries Driving Growth

It’s estimated that three countries will combine for 35% of all urban population growth.

RankCountryGrowth in Urban Population (2018-2050)% of Global Urban Growth
World860 million people35%
#1India416 million people17%
#2China255 million people10%
#3Nigeria189 million people8%

In total, there will be 2.5 billion more urban dwellers in 2050 than there are today. Many of these people will experience rising incomes in cities, increasing the global middle class to an unprecedented size.

3. Peaking Rural Populations

On the flipside, it appears the world’s rural population has nearly flatlined, with anticipation that it will peak in absolute terms in the next couple of years. Rural populations have been slowly growing since 1950 until this point.

4. The Rise of Megacities

There will be 43 megacities by the year 2050, which is more than quadruple the amount that existed back in 1950.

The changing geography of the world’s megacities will be one of the major forces that shapes the future of the global economy and accompanying investment trends.

5. New Population Centers

By 2050, more than 70% of the world’s urban population will live in Asia or Africa. Meanwhile, North America and Europe will combine for closer to 15% of that total.

6. De-Urbanization

The role of de-urbanization is often downplayed or forgot about when discussing urban demographics, but it is an interesting issue.

Factors such as falling fertility rates, economic contraction, and natural disasters are actually shrinking the size of some cities. In fact, McKinsey predicts that 17% of cities in developed regions will see a drop in population between 2015-2025.

7. Disparities in Urban Growth

The rate for urban population growth is actually trending down across all types of economies – however, these rates come from very different starting points.

High income countries are currently averaging growth of less than 1% per year, and this will continue to decline to below 0.5% per year by 2050. Over the same time period, low income nations will go from 4% to 3% per year.

8. Changes in Average Age

The age distributions in large cities within developed nations will begin to skew older, something we’ve shown previously when looking at the median age of every continent.

The biggest impact here may be felt on dependency ratios in the workforce. With a smaller pipeline of new workforce entrants and a burgeoning population of seniors, this changing ratio is one of the most significant stories impacting urban demographics.

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Cities

Ranked: The Megaregions Driving the Global Economy

Today’s stunning map ranks the world’s most powerful megaregions — together, they contribute a whopping $28 trillion to the global economy.

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Ranked: The Megaregions Driving the Global Economy

If you’ve ever flown cross-country in a window seat, chances are, the bright lights at night have caught your eye. From above, the world tells its own story—as concentrated pockets of bright light keep the world’s economy thriving.

Today’s visualization relies on data compiled by CityLab researchers to identify the world’s largest megaregions. The team defines megaregions as:

  • Areas of continuous light, based on the latest night satellite imagery
  • Capturing metro areas or networks of metro areas, with a combined population of 5 million or higher
  • Generating economic output (GDP) of over $300 billion, on a PPP basis

The satellite imagery comes from the NOAA, while the base data for economic output is calculated from Oxford Economics via Brookings’ Global Metro Monitor 2018.

It’s worth pointing out that each megaregion may not be connected by specific trade relationships. Rather, satellite data highlights the proximity between these rough but useful regional estimates contributing to the global economy—and supercities are at the heart of it.

From Megalopolis to Megaregion

Throughout history, academics have described vast, interlinked urban regions as a ‘megalopolis’, or ‘megapolis’. Economic geographer Jean Gottman popularized the Greek term, referring to the booming and unprecedented urbanization in Bos-Wash—the northeast stretch from Boston and New York down to Washington, D.C.:

This region has indeed a “personality” of its own […] Every city in this region spreads out far and wide around its original nucleus.

Gottmann, Megalopolis (1961)

By looking at adjacent metropolitan areas rather than country-level data, it can help provide an entirely new perspective on the global distribution of economic activity.

Where in the world are the most powerful urban economic clusters today?

The Largest Megaregions Today

The world’s economy is a sum of its parts. Each megaregion contributes significantly to the global growth engine, but arguably, certain areas pull more weight than others.

MegaregionCitiesRegionPopulationEconomic Output (EO)EO per Capita
Total602.2M$28,135B$46,720
1. Bos-WashNew York, Washington, D.C., BostonNorth America 47.6M$3,650B$76,681
2. Par-Am-MunParis, Amsterdam, Brussels, MunichEurope43.5M$2,505B$57,586
3. Chi-PittsChicago, Detroit, Cleveland, PittsburghNorth America32.9M$2,130B$64,742
4. Greater TokyoTokyoAsia39.1M$1,800B$46,036
5. SoCalLos Angeles, San DiegoNorth America22M$1,424B$64,727
6. Seoul-SanSeoul, BusanAsia35.5M$1,325B$37,324
7. Texas TriangleDallas, Houston, San Antonio, AustinNorth America18.4M$1,227B$66,685
8. BeijingBeijing, TianjinAsia37.4M$1,226B$32,781
9. Lon-Leed-ChesterLondon, Leeds, ManchesterEurope22.6M$1,177B$52,080
10. Hong-ShenHong Kong, ShenzhenAsia19.5M$1,043B$53,487
11. NorCalSan Francisco, San JoseNorth America 10.8M$925B$85,648
12. ShanghaiShanghai, HangzhouAsia 24.2M$892B$36,860
13. TaipeiTaipeiAsia16.7M$827B$49,521
14. São PaoloSão PaoloSouth America33.5M$780B$23,284
15. Char-LantaCharlotte, AtlantaNorth America 10.5M$656B$62,476
16. CascadiaSeattle, PortlandNorth America8.8M$627B$71,250
17. Ista-BursIstanbul, BursaMENA14.8M$626B$42,297
18. Vienna-BudapestVienna, BudapestEurope12.8M$555B$43,359
19. Mexico CityMexico CityNorth America24.5M$524B$21,388
20. Rome-Mil-TurRome, Milan, TurinEurope13.8M$513B$37,174
21. Singa-LumpurSingapore, Kuala LumpurAsia12.7M$493B$38,819
22. Cairo-AvivCairo, Tel AvivMENA19.8M$472B$23,838
23. So-FloMiami, TampaNorth America 9.1M$470B$51,648
24. Abu-DubaiAbu Dhabi, DubaiMENA5M$431B$86,200
25. Osaka-Nagoya (tied)Osaka, NagoyaAsia9.1M$424B$46,593
25. Tor-Buff-Chester (tied)Toronto, Buffalo, RochesterNorth America8.5M$424B$49,882
27. Delhi-LahoreNew Delhi, LahoreAsia27.9M$417B$14,946
28. Barcelona-LyonBarcelona, LyonEurope7M$323B$46,143
29. ShandongJinan, Zibo, DongyingAsia14.2M$249B$17,535

Altogether, these powerhouses bring in over $28 trillion in economic output.

Unsurprisingly, Bos-Wash reigns supreme even today, with $3.6 trillion in economic output, over 13% of the total. The corridor hosts some of the highest-paying sectors: information technology, finance, and professional services.

The largest city in Brazil, São Paulo, is the only city in the Southern Hemisphere to make the list. The city was once heavily reliant on manufacturing and trade, but the $780 billion city economy is now embracing its role as a nascent financial hub.

On the other side of the world, the cluster of Asian megaregions combines for $8.7 trillion in total economic output. Of these, Greater Tokyo in Japan is the largest, while Shandong might be a name that fewer people are familiar with. Sandwiched between Beijing and Shanghai, the coastal province houses multiple high-tech industrial and export processing zones.

The data is even more interesting when broken down into economic output per capita—Abu-Dubai churns out an impressive $86,200 per person. Meanwhile, Delhi-Lahore is lowest on the per-capita list, at $14,946 per person across nearly 28 million people.

Where To Next?

This trend shows no sign of slowing down, as megacities are on the rise in the coming decade. Eventually, more Indian and African megaregions will make its way onto this list, led by cities like Lagos and Chennai.

Stay tuned to Visual Capitalist for a North America-specific outlook coming soon, and a deep dive into the biggest factors contributing to the growth of these megaregions.

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Automation

Ranked: The Autonomous Vehicle Readiness of 20 Countries

This interactive visual shows the countries best prepared for the shift to autonomous vehicles, as well as the associated societal and economic impacts.

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For the past decade, manufacturers and governments all over the world have been preparing for the adoption of self-driving cars—with the promise of transformative economic development.

As autonomous vehicles become more of a looming certainty, what will be the wider impacts of this monumental transition?

Which Countries are Ready?

Today’s interactive visual from Aquinov Mathappan ranks countries on their preparedness to adopt self-driving cars, while also exploring the range of challenges they will face in achieving complete automation.

The Five Levels of Automation

The graphic above uses the Autonomous Vehicles Readiness Index, which details the five levels of automation. Level 0 vehicles place the responsibility for all menial tasks with the driver, including steering, braking, and acceleration. In contrast, level 5 vehicles demand nothing of the driver and can operate entirely without their presence.

Today, most cars sit between levels 1 and 3, typically with few or limited automated functions. There are some exceptions to the rule, such as certain Tesla models and Google’s Waymo. Both feature a full range of self-driving capabilities—enabling the car to steer, accelerate and brake on behalf of the driver.

The Journey to Personal Driving Freedom

There are three main challenges that come with achieving a fully-automated level 5 status:

  1. Data Storage
    Effectively storing data and translating it into actionable insights is difficult when 4TB of raw data is generated every day—the equivalent of the data generated by 3,000 internet users in 24 hours.
  2. Data Transportation
    Autonomous vehicles need to communicate with each other and transport data with the use of consistently high-speed internet, highlighting the need for large-scale adoption of 5G.
  3. Verifying Deep Neural Networks
    The safety of these vehicles will be dictated by their ability to distinguish between a vehicle and a person, but they currently rely on algorithms which are not yet fully understood.

Which Countries are Leading the Charge?

The 20 countries were selected for the report based on economic size, and their automation progress was ranked using four key metrics: technology and innovation, infrastructure, policy and legislation, and consumer acceptance.

The United States leads the way on technology and innovation, with 163 company headquarters, and more than 50% of cities currently preparing their streets for self-driving vehicles. The Netherlands and Singapore rank in the top three for infrastructure, legislation, and consumer acceptance. Singapore is currently testing a fleet of autonomous buses created by Volvo, which will join the existing public transit fleet in 2022.

India, Mexico, and Russia lag behind on all fronts—despite enthusiasm for self-driving cars, these countries require legislative changes and improvements in the existing quality of roads. Mexico also lacks industrial activity and clear regulations around autonomous vehicles, but close proximity to the U.S. has already garnered interest from companies like Intel for manufacturing autonomous vehicles south of the border.

How Autonomous Vehicles Impact the Economy

Once successfully adopted, autonomous vehicles will save the U.S. economy $1.3 trillion per year, which will come from a variety of sources including:

  • $563 billion: Reduction in accidents
  • $422 billion: Productivity gains
  • $158 billion: Decline in fuel costs
  • $138 billion: Fuel savings from congestion avoidance
  • $11 billion: Improved traffic flow and reduction of energy use
    • With the adoption of autonomous vehicles projected to reduce private car ownership in the U.S. to 43% by 2030, it’s disrupting many other industries in the process.

      • Insurance
        Transportation will be safer, potentially reducing the number of accidents over time. Insurance companies are already rolling out usage-based insurance policies (UBIs), which charge customers based on how many miles they drive and how safe their driving habits are.
      • Travel
        Long distance traveling in autonomous vehicles provides a painless alternative to train and air travel. The vehicles are designed for comfort, making it possible to sleep overnight easily—which could also impact the hotel industry significantly.
      • Real Estate
        An increase in effortless travel could lead to increased urban sprawl, as people prioritize the convenience of proximity to city centers less and less.
        • Defining the parameters for this emerging industry will present significant and unpredictable challenges. Once the initial barriers are eliminated and the technology matures, the world could see a new renaissance of mobility, and the disruption of dozens of other industries as a result.

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